Jesse Felder – Bad (Economic) News Is Good News (For Markets); Earnings Recap, Fed Outlook, Energy, Gold, Copper and Bitcoin Forecasts
Jesse Felder, Founder and Editor of The Felder Report joins me to discuss the state of markets balanced with the generally weaker economic data from the US and around the world.
We start with comments on how markets are disconnecting from recent economic data but that’s all carried over to investors projections on what the Fed will do with rates. We discuss the direction of inflation and key data to note. We also look into the energy sector, oil fundamentals specifically, and where price will go. Next are the metals, gold and copper outlooks for 2024. Finally I ask Jesse how Bitcoin fairs in 2024.
A key theme is looking into 2024 and how a possible recession will impact markets.
I agree with much of Felder’s views but not his take on the source of inflation since 2020. Supply chain problems were more a cover story than anything else which is why the vast majority of the price increases we’ve seen will prove to be permanent. M1 money supply hit $1 trillion for the first time in October 1992 and the Fed took the next 27 years to quadruple it. That’s right, in December of 2019 it topped $4 trillion. The previous quadrupling which took M1 to $1T actually happened in less time, “just” 20 years. But the next quadrupling of M1 did not take 27 years or even 20, obviously. Oh no, with the convenient cover provided by the plandemic the Fed was able to quadruple M1 in a matter of a few months (by May 2020) and well over a quintupling was reached less than a year later. Today, after all those “deflationary” interest rate hikes M1 is still a whopping 4.5 times what it was at the end of 2019 — basically unchanged from its peak for all practical purposes.
M2’s growth of over 40% is every bit as dramatic when you consider that it grew by about 3% during the second half of 2008 (during the “great financial crisis”).
https://fred.stlouisfed.org/series/M1NS
Great interview and enjoyable. Thanks.